THE CUSTOMS COLLECTION AT MARTYN FIDDLER AVIATION: CUSTOM CONTROLS AND AIRCRAFT MAINTENANCE

In this series of articles we will explain everything you need to know about customs duties, controls and reliefs. In particular we will explain who needs to know, how they apply to aircraft and what solutions are available.

What are customs controls? The acts performed by customs authorities to ensure compliance with rules governing the entry, exit, transit, storage and end-use of goods and their movement between different customs territories. This is a complex area and aircraft owners are often unaware of the network of customs rules applying to their aircraft as they cross borders.

At Martyn Fiddler Aviation we want to de-mystify this complex web of rules and provide you with the advice and solutions to ensure hassle free travel, whatever your purpose. In this article we will explain the requirements (and potential risks) for aircraft operators and their maintenance needs.

Maintenance of aircraft outside their home jurisdiction

While the departure of the United Kingdom from the European Union (also known as Brexit) is now a matter for the history books, the administrative and potential tax burdens are still having an impact on the aviation industry.

A key issue for business aircraft owners and operators worldwide is that of aircraft maintenance. If goods are brought into a customs territory, they need to come under some form of customs control; this could be a full importation or entry to a customs regime for a limited time. Often the goods are brought in for a specific purpose – in this article we will focus on maintenance.

Brexit resulted in a loss of customs privileges (free circulation) in either the UK or the EU for a number of aircraft. This has a knock-on effect by impacting customs requirements for aircraft maintenance. Where an aircraft does not hold import/free circulation status in the territory it is having maintenance in, then some form of customs control is required. In the UK and EU (as elsewhere globally), this is known as inward processing.

Temporary admission and maintenance. There is some confusion surrounding the use of ‘simplified temporary admission’ (a commonly used procedure for aircraft visiting a customs territory) and whether maintenance tasks can be carried out. While it is permissible to make unexpected repairs under temporary admission, it does not specifically allow aircraft to be brought into a territory for the purpose of repair. Additionally, temporary admission will not allow parts to be imported with similar relief to VAT & duty.

If you have an aircraft visiting under temporary admission and it unexpectedly requires significant repair, then a transfer to inward processing should be considered.

Inward processing

Inward processing is a customs special procedure that suspends any potential value added tax (VAT) and customs duties that would normally apply to maintenance works and also ensures wider customs compliance.

Some maintenance repair and overhaul facilities (MRO’s) are aware of these requirements, indeed, some facilities will provide inward processing cover to their client aircraft. However, many MRO’s (and aircraft operators) are not fully aware of the regulations and inadvertently fall foul of the rules as a result.

Aircraft operators and MRO’s must consider inward processing for aircraft arriving from outside their customs territory. While before Brexit the movement of aircraft between the UK and EU for maintenance was not an issue providing the aircraft was in free circulation, now an oversight or misunderstanding potentially exposes both parties to customs penalties which could be VAT (tax) on the current market value of the aircraft – in the UK this tax is 20%.

Does an aircraft need inward processing?

Recognising the need for obtaining customs cover (inward processing or otherwise) is essential for aircraft owners, operators and maintenance facilities.

Step 1: Understanding the customs status of the aircraft, namely, is the aircraft in free circulation in (a) the EU (if maintenance is in EU) or, (b) the UK (if maintenance is in the UK).

– If aircraft is in free circulation in the relevant territory then no other customs cover is (HG1) required

– If the aircraft is not in free circulation then it must be declared to customs control when crossing the border between territories

Step 2: Obtaining the cover required if the aircraft is not in free circulation. The following questions need to be asked:

– Does the operator hold inward processing authorisation with the customs territory where maintenance is to be carried out?

– Does the MRO which is being engaged for the maintenance work hold inward processing authorisation?

If the answer to either of above is “yes” the aircraft needs to be declared to this customs control on crossing the border.

If the answer is “no” it is not acceptable to simply ignore the requirement. At this stage (or prior to this!) you need to engage with an approved service provider who can extend their authorisation to you as either the operator or MRO.

Part of an end to end service

Martyn Fiddler Aviation provides inward processing as part of its end to end services. We work closely with all parties to ensure a seamless transaction in a compliant and risk mitigated way. We handle all the customs paperwork and administration on behalf of clients ensuring the entire process is conducted correctly and in full compliance of the applicable regulations.

Contact Phill Rawlins at phill@martynfiddler.com to learn more about inward processing and all services available in our customs collection at Martyn Fiddler Aviation.

Disclaimer:

The information included in this article is considered true and correct at the date of publication; changes to rules and regulation made after the time of publication may impact on the accuracy of the information referenced or inferred to in this article. The information in the article may change without notice and Martyn Fiddler Aviation is in no way liable for the accuracy of any information printed or stored or in any way interpreted and used by the user. This article or the information contained in it is not provided or intended to be used as advice of any form.

If you have any doubts or would like to discuss any aspect of this article, please do not hesitate to contact one of our experts who will be happy to discuss your individual circumstance.

Paul Cremer

My name is Paul Cremer, and this marks my 42nd year working within the business and general aviation industry. Over this time, I’ve had the privilege of overseeing a diverse array of sector activities, ranging from aircraft charter and management to air ambulance services, ground operations, air traffic control, airport management, technology implementation, and the outsourcing services I currently manage.

In my role focused on delivering advisory, technology, and outsourcing services to aviation customers, I handle a wide spectrum of responsibilities. This includes overseeing International Trip Support, Operations Control Centre Services (OCC), Continuing Airworthiness Management Service (CAMO), Airworthiness Reviews, ARC Services, Aircraft Delivery and Re-delivery Support Services, Maintenance Coordination Services including AOG, Tech Ops (Maintenance Control Centre), and managing myairops software products. As the Head of Aviation Delivery, I lead the customer-facing delivery of Technology & Outsourcing products and services for the market, drawing upon a wealth of knowledge, expertise, and industry connections within Gama Aviation’s Technology and Outsourcing Strategic Business Unit.

My journey into Business and General Aviation began during my teenage years while still in school. I was fortunate enough to be welcomed into the industry, starting at a flying club, and later working at the Air Traffic Services Unit at Blackbushe Airport. There, I maintained the ATC Movement Logs in the Control Tower during weekends, solidifying my passion for aviation. Upon completing my schooling, I seized opportunities at Fairoaks Airport, where I began as Ground Crew while pursuing my Aerodrome Flight Information Service Officer’s license. Advancements in my career led me to the role of Air Traffic Services Manager.

Since joining Gama Aviation in 1996, I’ve held various positions, including Operations Manager (Post Holder), Operations & Commercial Manager, Commercial Manager, Operations Delivery Manager, Head of Business Aviation Delivery, and currently, Head of Aviation Delivery. This role encompasses Gama Aviation Group’s Gama Aviation, myairops, and FlyerTech companies.

In 2023, I was honoured to be invited to serve as the Chair of the Operations Working Group for the British Business & General Aviation Association. This opportunity allows me to contribute to industry initiatives within BBGA’s membership of nearly 200 industry companies, focusing on challenges such as regulatory compliance, Air Services Agreements, technological advancements, workforce development, operational matters, and sustainability.

Marc Bailey

Marc Bailey has spent his entire career in aviation and has worked in most areas of Aviation Services with scheduled airlines, MRO’s, military contract support and latterly with associations, government, and its agencies.

Marc represents your position in Europe (even post Brexit) – as President of ECOGAS (European Council of General Aviation Support) which maintains a voice with EASA. All the major member states are represented on the ECOGAS board. With EASA restructuring its meetings with industry, ECOGAS is now well positioned to represent our position in all areas following industry partnerships with the European Independent Maintenance Group and with ARPAS the new drone and autonomous association.

Marc is chair of the UKASF (United Kingdom Airworthiness Strategic Forum) as part of an initiative to develop Aviation Services across all aviation activities. The UKASF pulls together airlines, MROs, Rotary, Drones, and commercial GA bodies to work with CAA and DfT. The objective is for industry to take the lead to drive strategic issues to benefit all parties. We are well positioned after four years to continue our good work and with the re-established role of Chief Surveyor in the CAA we have a good focal point to do this.

Marc chairs the CAA Finance and Services Forum which allows industry in the UK to discuss in the financial plans for the CAA and the value for money delivered by those funds paid by industry. This is a new and valuable new platform for all parties.

Under recent developments Marc has formed an alliance with, ARPAS, AOPA, BHA and BBGA so that we can strengthen our voice under a joint ‘GA 4 Biz’ banner. This alliance is working to do everything possible to represent the industry’s business interests with UK government and to help realise the Government’s desire to make UK General Aviation a Global Leader in a post Brexit environment. GA4Biz – GA4Biz

The next Generation initiatives with industry and government have continued to develop with the retention platform now evolving into the “Aviation Skills Recruitment Platform”. The platform now not only offers a vehicle for those offering and seeking posts in aviation, it also provides pathways with its TalentView portion seeking to provide pathways for new entrants into our sector. The recruitment platform is being further developed to include training opportunities across a wide range of providers, from government agencies through academic bodies. Getting our next generation activities right in the UK over the next couple of years is our single most important issue which we in aviation must grab with both hands. Marc is playing a central role to help develop many of these channels.

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